Murphy v. Uncle Bens Inc ( 1999 )

UNITED STATES COURT OF APPEALS
For the Fifth Circuit
No. 98-20239
DAVID E. MURPHY,
Plaintiff-Appellee,
v.
UNCLE BEN’S, INC.
Defendant-Appellant.
Appeal from the United States District Court
for the Southern District of Texas
February 25, 1999
Before WISDOM, STEWART, and DENNIS, Circuit Judges.
DENNIS, Circuit Judge:
The defendant in this case appeals the district court’s order
staying the plaintiff’s federal suit under the Age Discrimination
in Employment Act (“ADEA”) pending resolution of the plaintiff’s
parallel state action under the Texas Commission on Human Rights
Act (“TCHRA”). We conclude that the district court abused its
discretion in abstaining from exercising its jurisdiction over the
ADEA suit. We also reject the defendant’s argument that Section
633(a) of the ADEA expressly authorizes federal courts to stay
parallel state court actions.
I. Factual and Procedural Background
On April 11, 1997, plaintiff David E. Murphy (“Murphy”) filed
a complaint in the district court for the Southern District of
Texas alleging discrimination in employment pursuant to the ADEA,
29 U.S.C. § 621 et seq. On the same date, Murphy filed a petition
in the 129th Judicial District of Harris County, Texas, alleging
discrimination in employment under the TCHRA, Texas Labor Code §
21.001 et seq. The parties agree that the two suits contain the
same allegations based on the same set of facts. In August 1997,
defendant Uncle Ben’s, Inc. (“Uncle Ben’s”) filed answers to
Murphy’s state and federal suits.
In September 1997, the district court entered a scheduling
order directing the parties to conduct one set of discovery under
the Federal Rules of Civil Procedure that could be used in either
state or federal court. In September 1997, the state court also
entered a scheduling order. Thereafter, the parties exchanged one
set of written discovery for purposes of both the state and federal
litigation.
On September 26, 1997, Uncle Ben’s filed a Motion to Stay
Pending State Court Action, in which it asked the district court to
stay the state court action until the adjudication of the federal
ADEA action pursuant to 29 U.S.C. § 633(a) and Texas Labor Code §
21.211. Murphy did not file a response to Uncle Ben’s motion to
stay the state court proceeding.
On January 23, 1998, the district court issued an order sua
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sponte staying and administratively closing the federal case.1
Although the court cited Colorado River Water Conservation District
v. United States, 424 U.S. 800 (1976), as authority for abstention,
the court did not discuss the four factors enunciated in Colorado
River, or the two additional factors announced in Moses H. Cone
Memorial Hospital v. Mercury Construction Corp., 460 U.S. 1 (1983).
Uncle Ben’s filed a Motion For Reconsideration of the district
court’s order, which the court denied. Uncle Ben’s appealed.
II. Standard of Review
Generally, this court reviews for abuse of discretion a
district court’s decision whether to stay proceedings; however, to
the extent that a decision whether to stay rests on an
interpretation of law, this court’s review is de novo. Sutter
Corp. v. P&P Indus., Inc., 125 F.3d 914, 917 (5th Cir. 1997).
III. Discussion
Uncle Ben’s argues that: (1) the district court abused its
discretion by staying the federal action under the Colorado River
doctrine because exceptional circumstances did not exist for the
court to abstain from exercising its jurisdiction; and (2) the
district court erred as a matter of law by not staying the state
court action because: (a) § 633(a) of the ADEA prevents the
plaintiff from maintaining parallel state and federal age
discrimination lawsuits; and (b) the election of remedies provision
1
Although Uncle Ben’s did not ask for a stay of the federal
ADEA suit, abstention may be raised by the court sua sponte.
Bellotti v. Baird, 428 U.S. 132, 143 n.10 (1976); BT Inv. Managers,
Inc. v. Lewis, 559 F.2d 950, 954 n.16 (5th Cir. 1977).
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of the TCHRA prohibits the plaintiff from maintaining simultaneous
actions under the ADEA and the TCHRA.
A. Abstention From Exercising Federal Jurisdiction
Under the Colorado River Doctrine
Because of the “virtual unflagging obligation of the federal
courts to exercise the jurisdiction given them,” as between state
and federal courts, the rule is that “‘the pendency of an action in
the state court is no bar to proceedings concerning the same matter
in the Federal court having jurisdiction.’” Colorado River, 424
U.S. at 817 (quoting McClellan v. Carland, 217 U.S. 268, 282
(1910)). However, in “extraordinary and narrow” circumstances, a
district court may abstain from exercising jurisdiction over a case
when there is a concurrent state proceeding, based on
considerations of “‘[w]ise judicial administration, giving regard
to conservation of judicial resources and comprehensive disposition
of litigation.’” Id. at 813, 816 (quoting Kerotest Mfg. Co. v. C-
O-Two Fire Equip. Co., 342 U.S. 180, 183 (1952)).
While declining to prescribe a “hard and fast rule,” the
Supreme Court has set forth six factors that may be considered and
weighed in determining whether exceptional circumstances exist that
would permit a district court to decline exercising jurisdiction:
(1) assumption by either court of jurisdiction over a res; (2) the
relative inconvenience of the forums; (3) the avoidance of
piecemeal litigation; (4) the order in which jurisdiction was
obtained by the concurrent forums; (5) whether and to what extent
federal law provides the rules of decision on the merits; and (6)
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the adequacy of the state proceedings in protecting the rights of
the party invoking federal jurisdiction. Wilton v. Seven Falls
Co., 515 U.S. 277, 285-86 (1995) (citing Moses H. Cone Mem’l Hosp.
v. Mercury Constr. Corp., 460 U.S. 1 (1983)); see also Evanston
Ins. Co. v. Jimco, Inc., 844 F.2d 1185, 1190-91 (5th Cir. 1988).
The decision whether to surrender jurisdiction because of parallel
state court litigation does not rest on a “mechanical checklist” of
these factors, but on a “careful balancing” of them, “as they apply
in a given case, with the balance heavily weighted in favor of the
exercise of jurisdiction.” Moses H. Cone, 460 U.S. at 16.
(1) Assumption by Either Court of Jurisdiction Over a Res
This case does not involve any res or property over which any
court, state or federal, has taken control. The absence of this
factor is not, however, a “neutral item, of no weight in the
scales.” Evanston, 844 F.2d at 1191. Rather, the absence of this
first factor weighs against abstention. Id.
(2) The Relative Inconvenience of the Forums
The federal and state court suits are both in south Texas.
The parties agree that this factor is inapplicable. Therefore, its
absence weighs against abstention. Id.
(3) The Avoidance of Piecemeal Litigation
These cases do not involve piecemeal litigation, i.e., there
is “no more than one plaintiff, one defendant, and one issue.” St.
Paul Ins. Co. v. Trejo, 39 F.3d 585, 590 (5th Cir. 1994). The
federal and state cases involve the same plaintiff, the same
defendant, and the same issue, viz., whether Uncle Ben’s
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discriminated against Murphy in employment on the basis of age.
This parallel litigation is duplicative, not piecemeal; “[t]he
prevention of duplicative litigation is not a factor to be
considered in an abstention determination.” Evanston, 844 F.2d
1192 (citing Colorado River, 424 U.S. at 817). The only bar to
dual prosecution is dismissal due to res judicata. This factor
weighs against abstention.
(4) The Order in Which Jurisdiction Was Obtained
By the Concurrent Forums
The priority element of the Colorado River/Moses H. Cone
balance “‘should not be measured exclusively by which complaint was
filed first, but rather in terms of how much progress has been made
in the two actions.’” Evanston, 844 F.2d at 1190 (quoting Moses H.
Cone, 460 U.S. at 21). Both the federal and state court suits were
filed the same day. Uncle Ben’s has filed answers in both suits.
Both courts have issued scheduling orders. The district court’s
scheduling order provided that although only one set of written
discovery would be served by each party, the discovery would
pertain to both the federal and state causes of action, albeit
governed by the Federal Rules of Civil Procedure. Pursuant to
agreement of counsel, Murphy’s deposition was taken in both the
state and federal suits. The Supreme Court has emphasized that a
factor favoring dismissal of a federal suit is “the apparent
absence of any proceedings in the District Court, other than the
filing of the complaint.” Colorado River, 424 U.S. at 820. In the
instant cases, the state and federal suits are proceeding at
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approximately the same pace. Therefore, this factor weighs against
abstention.
(5) Whether and to What Extent Federal Law Provides
the Rules of Decision on the Merits
The purpose of the TCHRA is to coordinate and conform with
federal law under Title VII and the ADEA. See Caballero v. Central
Power and Light Co., 858 S.W.2d 359, 361 (Tex. 1993). “Texas
courts ‘may consider how the federal act [the Federal Civil Rights
Act] is implemented under clauses similar to those at issue in the
Texas act.’” Id. (quoting Eckerdt v. Frostex Foods, Inc., 802
S.W.2d 70, 72 (Tex. App. -- Austin 1990, no writ)). Therefore, in
reviewing an employment discrimination claim under the TCHRA, Texas
state courts are guided by both state law and federal precedent.
See Schroeder v. Texas Iron Works, 813 S.W.2d 483, 485 (Tex. 1991).
Federal law may be applied in the absence of state decisional law.
See Elstner v. Southwestern Bell Tel. Co., 659 F. Supp. 1328, 1345
(S.D. Tex. 1987), aff’d, 863 F.2d 881 (5th Cir. 1988); Fogle v.
Southwestern Bell Tel. Co., 800 F. Supp. 495, 498 (W.D. Tex. 1992).
“The presence of a federal law issue ‘must always be a major
consideration weighing against surrender [of jurisdiction],’ but
the presence of state law issues weighs in favor of surrender only
in rare circumstances.” Evanston, 844 F.2d at 1193 (quoting Moses
H. Cone, 460 U.S. at 26). Because these cases involve both federal
and state rules of decision, this factor weighs against abstention.
6) The Adequacy of State Proceedings In Protecting
the Rights of the Party Invoking Federal Jurisdiction
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The Supreme Court has declared:
When a district court decides to dismiss or
stay under Colorado River, it presumably
concludes that the parallel state-court
litigation will be an adequate vehicle for the
complete and prompt resolution of the issues
between the parties. If there is any
substantial doubt as to this, it would be a
serious abuse of discretion to grant the stay
or dismissal at all. Thus, the decision to
invoke Colorado River necessarily contemplates
that the federal court will have nothing
further to do in resolving any substantive
part of the case, whether it stays or
dismisses.
Moses H. Cone, 460 U.S. at 28 (citations omitted).
Murphy argues that although it is likely that no further
resort to the federal forum in this case will be necessary, given
that a decision on the merits would likely have a res judicata
effect, it could become necessary if he is not found in compliance
with certain procedural deadlines under the TCHRA.
This final consideration can only be “a neutral factor or one
that weighs against, not for, abstention.” Evanston, 844 F.2d at
1193. However, even if this factor weighed in favor of abstention,
alone it would not be sufficient to present the “exceptional
circumstances” required for the district court to decline to
exercise its jurisdiction.
Because the balancing of these factors “is heavily weighted in
favor of the exercise of jurisdiction,” in the absence of “only the
clearest of justification,” the district court abused its
discretion in staying the federal court proceeding pending
resolution of the state court suit.
B. District Court’s Authority to Stay State Court Suit
8
Under 29 U.S.C. § 633(a) and Texas Labor Code § 21.211
Under the federal Anti-Injunction Act, federal courts have no
authority to enter an injunction staying state court proceedings
“except as expressly authorized by Act of Congress, or where
necessary in aid of its jurisdiction, or to protect or effectuate
its judgments.” 28 U.S.C. § 2283. No party asserts that the
second or third exceptions apply in this case.
(1) ADEA § 633(a)
Uncle Ben’s argues that § 633(a) of the ADEA requires the
district court to stay the parallel state court proceeding.
Section 633(a) provides that:
(a) Federal action superseding State action:
Nothing in this Act shall affect the
jurisdiction of any agency of any State
performing like functions with regard to
discriminatory employment practices on account
of age except that upon commencement of action
under this Act such action shall supersede any
State action.
29 U.S.C. § 633(a).2
Uncle Ben’s argues that the Congressional intent of § 633(a)
is to authorize federal courts to stay parallel state court
proceedings pending resolution of the ADEA suit in federal court.
In support of its argument, Uncle Ben’s cites the Senate Report
from the 1978 amendments to the ADEA:
[I]f a lawsuit under a state age
discrimination law is pending at the time a
2
The 1967 legislative history of the ADEA indicates that the
word “supersede” means “stay.” See H.R. NO. 805, 90th Cong., 1st
Sess. 2 (1967), reprinted in 1967 U.S.C.C.A.N. 2213, 2224. See
also Dunlop v. Pan American World Airways, Inc., 672 F.2d 1044,
1049-50 (2d Cir. 1982).
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suit under the ADEA is filed, the state
lawsuit would have to be immediately held in
abeyance, pending a final resolution of the
federal litigation or a determination that the
federal and state actions are not coterminous
in nature.
S. REP. NO. 493, 95th Cong., 2d Sess. 5 (1978), reprinted in 1978
U.S.C.C.A.N. 504, 509 (quoted in Fiorenza v. First City Bank-
Central, 710 F. Supp. 1104, 1105 (E.D. Tex. 1988) (staying pendent
TCHRA cause of action pending outcome of ADEA claim)).
The U.S. Supreme Court, however, has declared that “Senate
Report No. 95-493 was written 11 years after the ADEA was passed in
1967, and such ‘[l]egislative observations . . . are in no sense
part of the legislative history.’ ‘It is the intent of the
Congress that enacted [the section] that controls.’” Oscar Mayer
& Co. v. Evans, 441 U.S. 750, 758 (1979) (alterations in original)
(citations omitted) (holding that under § 633(b) of the ADEA, in
States with agencies empowered to remedy age discrimination in
employment, a grievant may not bring suit under the ADEA unless he
first has commenced a proceeding with the appropriate state
agency).
Whatever evidence is provided by the 1978 Committee Report of
the intent of Congress in 1967, it is insufficient to overcome the
plain language of § 633(a). In Promisel v. First American
Artificial Flowers, Inc., 943 F.2d 251 (2d Cir. 1991), cert.
denied, 502 U.S. 1060 (1992), the Second Circuit examined this
plain language, reasoning that:
[t]he “supersede” language comes at the end of
a sentence which deals exclusively with the
jurisdiction of state agencies performing
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”like” functions in handling age
discrimination claims[.] . . . It seems
logical to assume then that the “state action”
referred to in the supersession provision is
the same type of “state action” that is the
subject of the first part of the sentence --
that of state agencies handling claims of
employment discrimination. This is the only
variety of state action the section addresses.
To read “state action” more broadly to include
actions independent of those handled by state
agencies -- including state court actions --
would be to divorce those words from the
context in which they appear -- a statutory
provision recognizing the power of state
agencies to handle discrimination claims on
their own.
Id. at 255-56. Therefore, under a plain reading of § 633(a), a
federal court is authorized to stay only state administrative
proceedings involving claims of age discrimination, not state court
suits under statutes such as the TCHRA. See id. at 256.
Hence, we conclude that § 633(a) does not constitute express
Congressional authorization for federal courts to enter injunctions
staying state judicial proceedings involving parallel state law age
discrimination claims.
(2) TCHRA § 21.211
Uncle Ben’s also argues that § 21.211 of the TCHRA prevents
simultaneous lawsuits under the ADEA and the TCHRA. Implicit in
Uncle Ben’s argument is that this state law provision authorizes
federal courts to stay parallel state court proceedings. Section
21.211, entitled “Election of Remedies,” provides that:
A person who has initiated an action in a
court of competent jurisdiction or who has an
action pending before an administrative agency
under other law or an order or ordinance of a
political subdivision of this state based on
an act that would be an unlawful employment
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practice under this chapter may not file a
complaint under this subchapter for the same
grievance.
Tex. Lab. Code Ann. § 21.211 (West 1998).
Uncle Ben’s cites no authority for the argument that this
provision of state law empowers federal courts to stay state court
actions. Moreover, it is without merit. Federal courts are courts
of limited jurisdiction and only Congress may expand or retract the
limits of federal judicial power. United Gas Pipeline Co. v.
Whitman, 595 F.2d 323, 330 (5th Cir. 1979).
IV. Conclusion
Based on the foregoing, the district court’s abstention stay
order is reversed, and this case is remanded for proceedings
consistent herewith.
REVERSED and REMANDED.
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